The job market in the Indian telecom sector is almost cold because of significant job cuts and lack of increase in pay hikes.
Employees in Indian telecom sector have received an annual salary increase of up to 7 percent, according to a report based on a survey.
Salary hikes for telecom employees have been muted compared to other sectors in India. The report said about 69 percent employees got an annual salary hike of 7 percent, while almost one-third of them received less than 5 percent hike.
Uncertainty market conditions are forcing telecom sector to reduce headcount. The telecom sector will continue to witness a decline in headcount for the next six to nine months, taking the total number of job losses to 80,000-90,000.
Interestingly, CEOs of all Indian telecom operators have retained their jobs despite poor performance in terms of financials.
The telecom sector, which has been witnessing tough times in terms of profitability due to rising competition and lower margins, has witnessed large scale layoffs making job scenario uncertain.
The CIEL HR Services report is based on a survey of nearly 100 senior and mid-level employees of 65 telecommunications, software and hardware service providers to the telecom companies.
The telecom sector has already lost around 40,000 people in the last one year. The job cut is likely to continue for the next six to nine months. Job loss will be touching 80,000-90,000 in 2018.
Telecom equipment makers such as Huawei, Ericsson, Nokia, ZTE, among others, did not report any job loss in India – officially.
But ministry of electronics and IT in December said the electronics sector added 4 lakh direct and indirect jobs.
There was a 27 percent increase in the investment in electronics manufacturing. Investment in electronics manufacturing reached Rs 1.57 lakh crore in 2017 against Rs 1.43 lakh crore in 2016 and Rs 11,000 crore in 2014.
Phone production in India surged almost 60 percent to 17.5 crore units in 2017 as compared with 11 crore units in 2016.
Telecom operators such as Reliance Communications, Aircel, Tata Teleservices, among others are downsizing their operations across the country. At the same time, BSNL, Airtel, Reliance Jio, Vodafone and Idea Cellular are in the process of expansion.
Due to currency issues and GST implementation, phone makers are also facing downturn in the device market in India.
The CIEL HR Services report said the attrition rate is like to remain high at least for the next two-three quarters and the sector is likely to lay off around 80,000-90,000 people.
Aditya Narayan Mishra, chief executive officer, CIEL HR Services, said: “Employees are worried about their job certainty with their present employer and increased levels of anxieties are contributing to the speculation.”
High cost of loan servicing, aggressive competition for share in wireless market, uncertainty of mergers among others blocked investment by telecom companies resulting in layoffs. Quarterly profit of Vodafone, Idea Cellular, Vodafone and Reliance Jio are not in line with the expectation.
The only good news for telecom job seekers is the 6.6 percent anticipated growth in India’s economy in fiscal 2018 and 7 percent growth in fiscal 2019 – predicted by banking group DBS in its economic report published on Friday.